Retirement can be emotionally draining, hectic, and full of anxiety, but with the correct superannuation scheming, your transition into a new, laid back lifestyle is made all the more easy. Superannuation in Australia is the collective name for arrangements made by people to have funds available after retirement. Completely government supported and endorsed, superannuation is a must-complete scheme before your big day. Among these, the Self-Managed Super Fund is a customizable scheme which keeps you in charge. The difference between an SMSF and other funds is that its members are, at the same time, its trustees. Hence, it gives more flexibility to members in terms of benefits and complying tax responsibilities. A great way to get started with your own SMSF is to give this great self-managed super fund scheme a try.
If you set up your very own SMSF, it means that investment decisions you make for the fund, as well as its responsibilities,are yours alone. It is a major financial decision for which your personal time and skills are a prerequisite. There are always better options to choose from; hence, choosing wisely is the key. Either way, one should consider professional advice before getting started.
A self-managed super fund or SMSF gives you control over your superannuation funds, so that you can invest in the manner you prefer. There exist rules as to where and in what you may invest, but these are practical and for the best of your interests.
According to the Australian Taxation Office, SMSF needs to be set up correctly, so that it becomes eligible for concessions in tax, can receive contributions, and is as administer friendly as possible. One needs to work out the structure of the fund, create a trust deed, and appoint trustees, among other important formalities.
Administering and reporting
Once you start your SMSF, you become obliged to arrange the annual audit of the fund, keep appropriate records, and lodge annual returns with the Australian Taxation Office as a trustee of your fund. These obligations must be met in due time in order to avoid getting penalized.
As a trustee, contributions from members and various sources can be received, albeit with some restrictions. These are mostly based on the member’s age and contribution. A self-managed super fund can have a maximum of four members; hence, a small family can pool their assets together and invest. The administration costs of such a fund become lower per person if assets are pooled in this way.
One needs to manage the investments of their fund in accordance with the laws. The investments must be separate from all personal and business affairs of the fund members including one’s own. A SMSF can borrow money to invest in real estate. There are rules that need to be followed for a self-managed super fund to pursue the property loan path. One should consult experienced accountants to guide them through the legislations and ensure that their SMSF is compliant.